In Re Lupron Marketing and Sales Practices Litig.
677 F.3d 21
| 1st Cir. | 2012Background
- Lupron settlement total $150 million, consumers receive $40 million; unclaimed consumer funds (about $11.4 million) to cy pres distribution.
- District court approved settlement and class certification; Samsell intervened and objected to the fairness and the cy pres distribution.
- Following implementation, the class received enhanced payments via an implementation agreement increasing consumer recovery; appeals were pursued over cy pres allocation.
- District court initially proposed cy pres to Brigham and Women’s/Dana-Farber Cancer Center (DF/HCC) for Lupron-related disease research; court eventually awarded all unclaimed funds to DF/HCC in 2010 with oversight plans.
- Samsell and other unnamed class members appealed the August 6, 2010 cy pres award; issues included timeliness, standing, and the court’s discretion in selecting and overseeing cy pres recipients.
- Court affirms cy pres distribution to DF/HCC, with an added requirement of an annual audit (DF/HCC to bear audit cost) under ongoing oversight.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of appeal from cy pres order | Samsell/Rohn argue late filing | Appellants timely under final order rule | Timely; order not final until Jan 3, 2011 |
| Standing to appeal cy pres distribution | Unnamed class members should be permitted via Samsell | Only intervenors/parties may appeal; Samsell has standing; Rohn/Sensing unclear | Samsell has standing; Rohn/Sensing remain represented by Samsell and thus affirmed |
| Abuse of discretion in cy pres recipient choice (DF/HCC) | DF/HCC not proximate to class injury; windfall risk | DF/HCC is appropriate org; ALI Principles allow reasonable approximation | No abuse; DF/HCC proper under reasonable approximation test with oversight |
| Judicial recusal and process integrity concerns | Judge's Vincent Memorial/MGH ties taint process | No substantial conflict; recusal not required; waiver | No error; recusal issue waived; process deemed proper |
Key Cases Cited
- In re Pharmaceutical Industry Average Wholesale Price Litig., 588 F.3d 24 (1st Cir. 2009) (cy pres approvals and 100% recovery benchmark for class members)
- In re Airline Ticket Comm'n Antitrust Litig., 307 F.3d 679 (8th Cir. 2002) (cy pres distribution requires reasonable approximation to class interests)
- Nachshin v. AOL, LLC, 663 F.3d 1034 (9th Cir. 2011) (geographic distribution and relation to class objectives matter)
- Klier v. Elf Atochem North America, Inc., 658 F.3d 468 (5th Cir. 2011) (windfalls; distribute to absent class members if feasible)
- In re Folding Carton Antitrust Litig., 744 F.2d 1252 (7th Cir. 1984) (cy pres distribution validity in antitrust context)